Joint doorstop interview, Tamworth

SUBJECTS: Housing affordability; WA election; December Quarter National Accounts; Turnbull Government’s support for business investment; Labor’s threat to the Australian economy; regional infrastructure; the Rural Industry Research Development Corporation; coal mining

DEPUTY PRIME MINISTER:

It’s really good to have the Treasurer of the Commonwealth of Australia here in Tamworth. It’s been great to go round with Scott yesterday, talking to people in the property development area, seeing the work that’s done. We went out through Moore Creek, and saw the new development that’s going out there, I know that the Treasurer has an intense interest in housing affordability, it’s never a panacea but part of the solution is people living in regional towns and how we make sure we grow these regional areas and regional cities like Tamworth, how important it is for decentralisation, with things pertinent to this area such as moving the APVMA to Armidale, also RIRDC which we moved to Wagga, the GRDC, Grain Research Development Corporation which is at Toowoomba, Dubbo and Western Australia, all part of the solution of how we actually get development of areas so that people can have affordable housing. I know Scott has a whole range of investigations underway to make sure we assist people in our large capital cities we well.

It also very opportune to have the Treasurer here as we get ready for the Budget, I know he is not going to tell you what’s in the Budget because otherwise there’s no point having a Budget but it’s great to make sure our area, regional Australia, is front and centre and part of the solution. I also say that regional Australia is doing its part when we see what is happening with agricultural exports and agricultural incomes it’s basically 23.7 per cent trend growth in agriculture to December 2016, that is an incredible turnaround. No sector contributed more to the GDP figures for the quarter than agriculture. We are seeing that money flow back, we’re seeing it now that people are actually getting real wealth coming back into their lives so they can do the things that other people have taken for granted for so long. Buy a new car rather than a second hand car, they can renovate their kitchen, do the things that give them that standard of living which is commensurate with the massive work that goes into running a property. It’s great to see that money turning up.

Now as we continue on, I know that I’ll jump in front and say the Western Australian election, yes there’s no doubt about it. Congratulations to the Labor Party - they won. The choice has been made by the people. They made a choice for change. We should also recognise the immense work Colin Barnett and his team, and Brendon Grylls have done. They have been part and parcel of a very effective government and I think we should also recognise the effort they have put in and we wish the incoming administration all the very best. I’ll hand over to the Treasurer.

TREASURER:

Thanks Barnaby. It’s great to be here with the Deputy PM, here in New England, and particularly here in Tamworth, at what is the epicentre of an incredibly tremendous growth story we are seeing in regional Australia, I know on so many occasions we talk about some of the challenges of regional Australia and rightly so, there are parts of the country in regional areas, as Barnaby knows full well, that are doing it tough but here in the New England what you are seeing is the combination of patient investment and belief in themselves which has yielded some great results. Across this district, we are seeing a great growth story. That story that Barnaby just talked about from the December quarter accounts, it has been the rural and regional sector, particularly the rural sector, driving that growth in the December quarter, along with many other sectors sure, the services sector, sure. What we saw in resources also in that quarter, but what has been happening in agriculture has been very exciting to see, and talking to people over the past 24 hours, it’s great to see the smile on their faces, it’s great to see the reward for their patience, and their hard work, and their commitment and to see those dividends now, see those results, and to see that investment back in the town.

Barnaby talked about housing affordability, he is right to say that towns like Tamworth, towns like Dubbo, towns like Wagga, towns like Toowoomba or right across regional Australia they also have a role to play in the stresses in our major cities and towns like Tamworth provide the choice for people living in large cities to come here, establish their families, have the jobs they want, to have the opportunities and lives that they want for them and their families. These are real opportunities and so I think that’s a very exciting thing to see. Talking to some of those who build many of the houses here, they are looking forward to growth in Tamworth, and that’s true in many parts of regional Australia where you are seeing these economies be self-supporting, diverse. Everything from the meat processing industry through to civil contracting, through to housing development, all of this is a really good story, it’s been a good opportunity to be here with Barnaby to see it on the ground first-hand what our trade deals are achieving for the country, what the hard work and investment of Australia’s agricultural sector is achieving and to see the great optimism – we’ve had 26 years, this year, of consecutive annual economic growth but there are better times coming. There are even better times coming. I see that particularly here in New England.

Can I also say, in terms of Western Australia, can I congratulate Mark McGowan and the Government he is now forming, obviously the Government at a Commonwealth level will work with that government as we seek to work with all the state and territory governments, whether it’s issues of housing affordability or regional Australia, we have responsibilities as governments to work together. But can I commend particularly commend Colin Barnett, a great Western Australian who has served his state incredibly well, served his country incredibly well, he has stewarded Western Australia through one of the most difficult transitions that any premier has had to face with the transition in the mining and resource sectors. It has been a very tough job for Colin and that result obviously from the Liberal Party’s point of view is disappointing today but the voters have spoken. All governments listen to their votes. The liberal party and the National Party certainly will be doing the same. Western Australia, there aren’t many more parochial stats than Western Australia, and those issues in Western Australian elections are always very much determined on what happens in Western Australia. We thank Colin Barnett and we wish for the sake of the people of WA, that the new government works well.

QUESTION:

A report today that you’ll be banning foreign ownership of more than 50 per cent of new developments, is that true?

TREASURER:

Again, that’s Budget speculation. Tis the season for Budget speculation. The Budget is in May. Our decisions across a whole range of measures, whether it’s on housing affordability or other areas will be addressed in that Budget. But, I will say this, it is this Government that has already acted on curbing foreign investment in residential real estate. It is this Government, myself and my predecessor Joe Hockey that has forced the divestment of more than $100 million in residential property sales that were illegally acquired by foreign investors, we tightened the rules, we’ve toughened the restrictions and that has had real results. We have increased the penalties, some 560 plus penalty notices have been issued by cracking down on the rules we toughened on foreign investment. Now it was Chris Bowen, actually, as assistant treasurer loosened the rules on foreign investment in residential real estate. He actually made it easier for foreign investors to buy residential real estate in Australia. Our Government has toughened those rules and we haven’t just toughened the laws, we’ve actually increased the compliance resource to make sure that if foreigners buy residential properties illegally, then we’ll track them down and force them to sell it and that’s what we have done.

QUESTION:

This is similar to a One Nation policy, given the preference arrangement in WA, is One National setting the political agenda at the moment?

TREASURER:

As I said to you, we’ve already acted on the issue of foreign investment in residential real estate since we first were elected back in 2013. Those actions are getting results. In particular, we have already restricted the amount that foreign investors can buy in any one development. That is an existing rule that was brought in by our Government. The question is, is that going to be further restricted? These are matters for the Budget and I will address them there.

QUESTION:

Was the preference deal a mistake?

TREASURER:

I will leave it to the Western Australian division to go over the entrails of that result. But the Government is not distracted by these tactical issues, the Government, at a commonwealth level, is focussed on doing the most important thing we can. It doesn't matter whether it’s here in Tamworth, across in Bunbury, up in Darwin, out in suburban Melbourne, or back in my beloved Shire in Sydney. Barnaby and I and the Prime Minister want to see Australians earn more. Small businesses, we want to see them earn more, earn better profits so they can take on more staff, employ more people, increase their business. We want to see Australians working hard earn more. Wages growth has been very flat for a long time. It’s the biggest challenge we have economically. You can’t get a pay rise in a business that isn’t making a profit; you can’t get a job in a business that isn’t open. To see these wages rise then we need to see businesses do well. And it's great to see businesses doing well here in Tamworth.

QUESTION:

Treasurer, is decentralisation a mistake from an economic point of view, we see leases broken in Canberra and millions of dollars lost, key people in departments quit rather than relocate. How does it weigh up on the balance as an economic measure?

TREASURER:

I know that Barnaby will very much want to comment on this, but before he does that I’m going to back him in, before he even makes the comment. Barnaby is right on this, Barnaby is absolutely right on this. Whether it's here or elsewhere across the country, where they can benefit from these decisions and that can further provide the critical mass that is needed for these centres to go from the next level and to provide Australians with real opportunities in regional Australia. For living in regional Australia to become a real and viable choice for Australian families, this is only a good thing and I commend Barnaby for the leadership he has shown on it and he has mine and the Prime Minister's absolute backing on it.

DEPUTY PRIME MINISTER:

Thanks for that. It’s good to actually have the Treasurer re-endorse that. Let’s just quickly go through this. RIRDC, the Rural Industry Research Development Corporation, is moving to Wagga and will be saving the taxpayer, this is in the Senate estimates, $1.2 million a year, a year. On rent alone, we save more than $200,000 a year. Yet we have the Labor party running around saying it’s a bad idea, they will never support regional development. They give you the rhetoric but when you put their feet to the flame and say will you actually back in Armidale, are you actually going to back in regional towns? And there are a lot of people up there who support the Labor Party in Armidale, and now what they hear is their party absolutely bucketing on Armidale, ridiculing it, and that really fleshes out where the Labor Party is on these issues. It’s all a myth. Where is their policy on regional development? Where is the Labor party policy? Whiel you’re at it, where is the Labor party policy on agriculture? They had 100 positive policies, and not to do with one of the biggest contributors to the Australian economy, which is agriculture. We wouldn’t have a city called Canberra unless it was the policy of the government of the time. It was part of the constitution, they had to have the capital, the administrative centre, more than 100 miles from Sydney and Melbourne, so we got Canberra, they looked at other places, including Armidale at that time, they looked at Woolbrook, now we created a marvellous city. An absolute icon. Canberra is beautiful and it’s big enough to start really growing under its own weight. Isn’t it fair that the largess of government should also be shared more evenly around? Isn't it fair that other areas should get other opportunities which has been done so perfectly with Canberra? Isn’t it logical that the agricultural areas where you’re dealing with pests and veterinary issues to do with agriculture should be in a city that is designed, has a university that studies agriculture, doesn’t that make logic? But of course, the Labor Party says no, to try and create problems to just look after, to be quite frank, their interests in Canberra. They’re going to bucket on regional areas. We’re not in the Coalition, we believe in regional development, we’re doing it, we’re living it, and you can it here in Tamworth.

QUESTION:

Mr Morrison what were the Tamworth businesses telling you with concerns facing them today?

TREASURER:

The topic that came up unprompted was support for the Government’s position on company taxes, because these are businesses now in Tamworth which are seeing the benefit of the improvement in the agricultural sector, and they are seeing a bit more money flow through the system. What that means with lower company taxes for these businesses is that gives them more room to invest more back in their business. It’s one of the really encouraging things I find when I come to regional areas and I particularly talk to small and medium sized businesses. They get it, that when the times improve, that’s the time to invest, it’s not the time to splash the money around on the things that don’t have enduring value, those businesses know that that money was hard to come by, and when they get that opportunity they want to invest. What we want to do by taking the tax monkey of businesses’ backs, particularly here in places like Tamworth, is it avails them to invest more back in their business. The Labor party scoffs at whether it’s 2.5 per cent or whatever it is, I mean, they think those sorts of things don’t matter to Australian businesses, and the 100,00 employees who work for businesses that have a turnover between two and 10 million, we know every dollar counts in a business. Every single dollar. Every opportunity we get to invest another dollar in their business, is another investment in the growth, and not just in the business, people I met in there today, this is the really exciting thing about this Tamworth story, there are businesses represented, that we were meeting with today that have experienced all of their growth out of the growth of Tamworth. They’ve realised incredible business achievements by investing here and seeing their businesses grow here. They know that when Tamworth wins, they win. And they keep investing back into the town and into the region. They don’t want to be part of a town that’s going backwards they want to be part of a town that’s going forwards. I think that sort of great commitment to both the town, the centre, the region. They see coming back to them in greater prosperity which they share. That’s their story, it’s a very positive story. I think that should be an encouraging thing for all Australians, that there are great regional economic success stories happening right now, and that’s a great thing to be seeing in our economy.

QUESTION:

Given the growth in agriculture and what it’s doing for the nation’s economy, should we expect to see more investment into regional areas?

TREASURER:

You’re already seeing that. What you’re seeing happen at the moment is a response in part to the investments that are being made by this Government. Whether it’s our investment specifically in regional development programmes, Barnaby might want to comment on this as well, it’s our $50 billion dollar rolling infrastructure programme, but then looking ahead to major economic infrastructure projects, like the inland rail project, which is one that Barnaby and I both share a passion for. The investment that we’re making in our water infrastructure funds in dams, you could go further north into our Northern Australia Infrastructure funds, the investment we know we need to make in energy infrastructure to support all over the country, whether it’s industry which makes up 50 per cent of the electricity bill in this country and usage, or it’s in roads, rail, ports and these areas, the infrastructure investment we’re rolling out as a Government is unprecedented, and you’ve got to invest in that infrastructure, because that is what supports the productivity and the growth, particularly in centres like this.

DEPUTY PRIME MINISTER:

Let’s look anecdotally at this electorate and then look across the nation, let’s start from the top, [inaudible] the mobile phone upgrades across the length and breadth of this electorate, the NBN rolling out in this city now, the Armidale airport upgrade, Chaffey dam upgrade, which we started and completed on time and is now full. Another $75 million on the table for Dungowan dam, Scone bypass as we go down the road, they’re going through the process now, they’re going to be driving on it by the end of 2019. You’re seeing that investment through the length and breadth, and even if you go beyond that, the investment we’ve made in health and then you’ve got the investment that you don’t see that’s critical, such as the investment in three free trade agreements, nine new live animal destinations, things that are bringing in real money back into this area. We are real benefices of this, real beneficiaries of it. It [inaudible] in every sale yard, because of the work that’s being done at that level. Now, across the nation, inland rail, corridor of commerce from Melbourne through to Brisbane, dams in the north, sealing roads such as a Peninsula Development road, right up in the cape, where you start with 600km of dirt, we’re now down to 200km of dirt. Put $100 million into [inaudible]. This is real investment, real investment, and all through it we can go up to the North, with the huge turnaround in the live cattle trade, putting real money back in, the growth in such things as Darwin and what we’re doing there in the gas industry, massive investment, massive investment is happening across this nation and when you see the results, and the results that Scott has carriage of, that we last quarter grew at 1.1 per cent. It’s happening, it’s turning around. Sometimes, we don’t see our message because we hear it all the time, it’s really important to say thank-you. I could take you out and literally put your hand on the investment we’re making, or I can actually show you the books and say there it is.

QUESTION:

Agriculture is hitting record numbers, we saw the Planning Assessment Commission in New South Wales reject the expansion of Drayton South in Muswellbrook on the basis of its proximity to agriculture, we are now hearing that analysts who are negotiating in Japan and China are saying that [inaudible] will probably give a 50 percent increase on last year, so, given that this whole process is about repositioning regional economies, coal mining is a pretty good way to do it, do you think that any of these arguments, when you throw them into, will change the argument for or against [inaudible]?

DEPUTY PRIME MINISTER:

I’ve always been very clear on this. Coal mining, [inaudible] close down coal mining, well they’ll send our nation broke. That doesn’t mean that we want a coal mine in the middle of your living room, there are certain areas where it’s appropriate, certain areas where it’s not appropriate, the middle of prime agricultural land it’s not appropriate, but in other areas of course it’s appropriate. What the Greens are always trying to do, is get you in this binary position, where they are either totally for coal mining or totally against it. That’s just not a very sophisticated [inaudible]. Might be a very clever political approach, but it’s not a very sophisticated approach, I support coal mining and I’ll give you a big one that should be going right now, that’s Adani in central Queensland, massive investment, why is it being held up, why isn’t this thing moving. This is about a $16 billion investment and the people up there are screaming out for it. Let’s get the mines in the areas where it’s appropriate. That does not mean you support it carte blanche. To be quite frank, there’s coal underneath Sydney, I don’t think Scott is going to be very happy if they go down and say mate, I’m going to put one in the Shire.

TREASURER:

The DPM is absolutely right when it comes to this. It’s not a carte blanche, but what we are saying is a government we don’t reject the coal has in our energy future. We’ve got five coal-fired power stations, that over the next 10 years are going to close because of their economic life, and we’ve got one closing down in Hazelwood, and the Labor party is cheering that process on. They’re actually cheering on the closure of those stations and the loss of jobs that has happened. That’s what they wanted to happen. That was the point of their policies. That’s what they were designed to do. When you look at the hurt of what’s happening in places around Hazelwood, you feel for the people who are affected in those areas, and that’s why we’ve taken the actions that we have, but as Barnaby says, that doesn’t mean you open up one anywhere. You be sensible about it. Making sure we keep our coal-fired stations open as long as we can to ensure that we have that continued base load support is critical while we move to other technologies and new things are developed. Particularly in storage where I know the Prime Minister is incredibly focused. More affordable energy for businesses and households, for families, is what the coalition stands for, and the Labor party is just driven completely by ideology.

QUESTION:

Mr Morrison you went to Willow Tree last night… [inaudible]

TREASURER: I watched the Sharks beat the Raiders too last night, when I was there, it was a very good win. How good was that?

QUESTION:

[Inaudible] Your Government signed off on that when it has the chance to reject it, now the New South Wales Government is [inaudible] did you get it wrong? Did your Government get it wrong?

TREASURER:

I think Barnaby has already covered off on that.

DEPUTY PRIME MINISTER:

First of all, we put more conditions, we get right to the edge of what we could do before you’d end up in the High Court. Greg Hunt, and all the commissions, that [inaudible], I think of the 17 steps, the Federal Government is response for one of them, the rest were the State Government’s responsibility. There is no [inaudible]. People know the views I have about prime agricultural land, and what was granted there was an application to investigate where [inaudible], it’s an exploration licence, not a mining license. An exploration license. Now, it’s quite obvious the concerns that are held there, [inaudible]. It’s no longer in the electorate but that doesn’t excuse me of it. I have been following this issue through all the way along, BHP is no longer going forward with their mine. I think that’s a pretty good indicator of what people think.